Diesel price surge jolts trucking industry

Oil tankers sit at anchor offshore in the Strait of Hormuz off Bandar Abbas, Iran, in May. (Amirhosein Khorgooi/ISNA via AP)

Skyrocketing diesel prices are jolting the trucking industry amid a global energy crisis that also threatens freight movement.

Iran and its allies have put pressure on global supply chains in response to the U.S. and Israel launching a war Feb. 28. This has notably included an ongoing blockade of the Strait of Hormuz and, more recently, the Bab el-Mandeb Strait. Drones also struck a Saudi oil pumping station in an attack on its critical East-West Pipeline.

“We’re now in a troubling crude oil supply situation, the worst it’s been since several months ago,” said Jason Miller, professor of supply chain management at Michigan State University. “The extent that the Saudi East-West Pipeline is damaged, that’s going to be the thing that determines whether oil goes to $120 or $130 a barrel over the next couple weeks.”

The U.S. Energy Information Administration reported national diesel prices reached $6.29 per gallon Sept. 14, a 68.1% increase from $3.74 during the same time in 2025. They are also 65% higher than the $3.81 price at the start of the war. S&P Global Commodity Insights reported Platts Dated Brent reached $114.26 a barrel Sept. 9.

“You’ve got diesel prices almost at double what they were a year ago,” said Dean Croke, principal analyst at DAT Freight & Analytics. “Your large contract carriers are somewhat insulated from this discussion about diesel prices. I think it’s an important distinction. But your spot market carriers are getting crushed.”

Spot market carriers hit hard

Croke described small spot market carriers as enduring an existential crisis due to their limited cash flow and inability to add surcharges. He is concerned that rising diesel prices could lead to trucking company failures, including stoppages, bankruptcies and independent drivers moving to large truckload carriers, with recent recruitment efforts indicating a soft landing.

“Where a lot of shippers are struggling is they’ve been debating how much of this do we absorb versus how much do we pass on,” Miller said. “I would say, really up until the last couple weeks, there has always been this idea that this is a temporary issue.”

Miller noted that companies typically respond to temporary cost shocks by absorbing a disproportionate amount to avoid alienating customers. But now he suspects they are starting to feel the situation isn’t temporary, so are willing to raise prices. He expects to see more instances in which fuel costs are passed down to consumers.

“Normally, when we talk about the energy markets, they would typically be a negative for transportation, and they haven’t been,” said Eric Starks, chairman of FTR Transportation Intelligence. “But that’s really only because the underlying demand for other services has been so strong. What ultimately is the big concern for us is what does this do to inflationary pressure.”

Data center construction

Starks pointed out that freight demand has helped prevent a more dire situation, especially freight tied to data center construction. He noted that spot prices have been strong enough to make recouping fuel costs almost a nonfactor, but he also expressed concern over how long these pressures can continue before problems escalate.

“We can’t continue this indefinitely,” Starks said. “You can’t continue having high prices of, what I would call staple goods, or what everybody uses every day, continuing to be elevated. And it’s moving in the wrong direction.”

Croke echoed the sentiment, warning that at some point demand destruction happens. The inflationary effects of rising diesel prices could eventually cause demand to collapse for goods and shipments. This would leave truckers facing higher fuel costs and less business.

He warned that the indicators suggest diesel prices will continue to increase.

“I don’t think we’re there yet, but we have to be awfully close,” Croke said. “There’s no sign that diesel prices are going to stop because we’re heading into peak demand for harvest season, winter and maintenance season in the refinery world. Refineries are already at 97% production, so we don’t have the ability to produce more and our reserves are low.”

Croke noted that the industry already has dealt with headwinds such as a fragmented demand environment in which shipments associated with data center construction are doing well, while areas like the consumer economy are not.

Craig Geskey, vice president of strategic growth at Traffix, echoed that point, noting that many of his customers are shipping less this year.

“Fuel is adding another layer of pressure, especially for smaller fleets paying at the pump today and recovering the surcharge later,” he said. “But fuel isn’t the whole story. Insurance, equipment, maintenance, driver and compliance costs were already elevated. If diesel comes back down, that doesn’t mean linehaul rates automatically follow.”